Mortgage delinquencies rose more than 13 percent in September registering the largest single-month rise since November 2008 according to Black Knight's First Look at the mortgage performance data for September.
Black Knight said that while September delinquency increases are quite common, three factors led to the large surge seen during the month this year. "Sixteen of the last 19 Septembers have seen delinquencies increase, averaging a 5.2 percent rise over that time frame, the largest of any month during the calendar year," the report stated.
While that may be the case, the fact that September ended on a Sunday and cut short the number of days for mortgage payments to be processed also contributed to the increased number of delinquencies. Though both these factors have been a common occurrence over the years and were by far the bigger reason for the spike, the report indicated that Hurricane Florence also contributed to the surge in delinquencies during the month.
Hurricane Florence-related delinquencies increased 38 percent month-over-month, with more than 6,000 borrowers already missing a payment as a direct result of the storm, Black Knight said in its report.
These three factors—the impact of Hurricane Florence, the fact that the month ended on a Sunday, and that historically September has been a month where delinquencies increase—have resulted in the sudden spike.
Despite this increase, the report revealed that foreclosure starts posted a double-digit monthly decline and hit an 18-year low with 40,000 starts recorded during the month. The report also indicated that the inventory of loans in active foreclosure and the foreclosure rate fell below their pre-recession averages for the first time since the financial crisis.
However, monthly prepayment activity fell by 25 percent from August 2018. The report attributed this fall to rising interest rates and home prices that were putting pressure on home affordability as well as prepayment speeds.
Regionally, Mississippi saw the highest non-current percentage of loans at 10.33 percent followed by Louisiana, Alabama, West Virginia, and Arkansas.
Colorado led the states that saw the least number of non-current percentage of loans at 2.01 percent, followed by Oregon, Washington, Idaho, and North Dakota.